Sugar policy will lead to higher rates after polls

NEW DELHI: The government���s effort to keep the sugar prices low during the election season could lead to higher sugar prices post-elections, according to industry experts who claim that the current raw sugar import policy is unviable.

In a bid to ensure low prices, the government has allowed zero duty imports of raw sugar for delivery before July 15.

With sugar output projected at a low 14.5 million tonnes in the coming season, the government expects imports of some 35 lakh tonnes of sugar���25 lakh tones raw and 10 lakh tones white sugar ��� this season to add to carryover stocks into 2009-10 and bolster domestic supply and temper prices.

However, international raw sugar prices have shot up ever since India announced zero duty imports, from around $280/tonne (landed price) to $360/tonne for July contracts.

Now, with the government yet to extend zero-duty imports beyond July 15, mills are forced to import raw sugar at high prices on the background of acute domestic sugarcane production shortage in the coming season, industry insiders say.